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Tuesday 6 March 2018

18-065MR ASIC winds up Cairns-based car lender for unpaid fines

ASIC has obtained orders winding up Channic Pty Ltd (Channic) and Cash Brokers Pty Ltd (Cash Brokers) for their failure to pay fines and cost orders awarded to ASIC by the Federal Court. Mr Ian Currie of BRI Ferrier has been appointed as the liquidator.

ASIC also commenced bankruptcy proceedings against the director of those companies, Mr Colin William Hulbert, however Mr Hulbert declared himself bankrupt prior to the hearing of that application.

In April 2017, the Federal Court fined Channic, Cash Brokers and Mr Hulbert a total of $776,000 and ordered the payment of ASIC's costs of $420,000 after finding, in proceedings brought by ASIC, that Channic and Cash Brokers breached their responsible lending obligations under the the National Credit Act, engaged in unconscionable conduct and entered into unjust transactions. Channic, Cash Brokers and Mr Hulbert operated a used car dealership in Cairns.

ASIC brought civil penalty proceedings against the companies after the Indigenous Consumer Assistance Network (ICAN) reported that Channic and Cash Brokers were dealing unjustly with vulnerable Indigenous consumers from the remote community of Yarrabah.

Background

ASIC commenced its proceedings after an investigation revealed that Cash Brokers was assisting consumers to obtain loans from Channic at an interest rate of 48% to purchase vehicles from a related entity. This was in addition to charging brokerage fees of up to $990. Channic did not assess whether the loans were suited to the consumers' requirements. The consumers largely lived in the relatively isolated Aboriginal community of Yarrabah, located near Cairns.

In addition to imposing fines and cost orders, the Court also awarded a total of $47,699 in compensation to affected consumers, which also remains unpaid.

This action came as a result of collaboration between ASIC's Indigenous Outreach Program and ICAN. ASIC's Indigenous Outreach Program is staffed by lawyers and analysts, the majority of whom are Indigenous. The Indigenous Outreach Program gathers intelligence from Indigenous consumers and their advocates (such as ICAN), undertakes surveillance, implements targeted financial literacy programs and works with industry to improve access to appropriate products and services.

ICAN, among other things, provides financial counselling services to Indigenous consumers in North QLD and noticed that many of their clients were suffering financial hardship as a result of loans they had taken out with Channic. ICAN assisted ASIC to maintain communication with Indigenous consumer witnesses throughout the course of the proceedings.

ASIC's MoneySmart website has information for Indigenous consumers on buying a car.

ASIC also offers a dedicated help line to assist Indigenous consumers with financial issues (Phone: 1300 365 957).